Press Release

TAQA Shareholders Approve Transaction to Accelerate Transformation of the UAE’s Power and Water Sector

Shareholders of Abu Dhabi National Energy Company PJSC (“TAQA” or “Company”) have voted at the Company’s Annual General Assembly to approve the transfer of the majority of Abu Dhabi Power Corporation’s (“ADPower”) water and electricity generation, transmission and distribution assets to TAQA, which is owned by ADQ, one of the region’s largest holding companies.  This transaction creates one of the largest utilities companies in the GCC, and a top-10 integrated utilities player in the EMEA region by regulated assets.The transaction, which is scheduled to close in the third quarter of 2020, creates a regional utilities champion with the financial strength and expertise to accelerate the transformation of the UAE’s power and water sector and the capacity to pursue new growth opportunities in international markets. TAQA will benefit from enhanced revenues, a robust capital structure producing stronger cash generation, with potential for significant and sustainable dividends and business growth.When the transaction is completed, TAQA’s assets will include majority stakes in almost all power and water generation plants in the UAE, making it the nation’s predominant power and water, transmission and distribution company. TAQA will also continue to operate in the USA, Oman, Morocco, India, Saudi Arabia and Ghana, as well as oil and gas operations in the UK, Netherland, Canada and Iraq.By combining TAQA’s and ADPower’s highly complementary businesses – and strategic and operational expertise – the company will be well-positioned to pay consistent dividends to shareholders in the future.

TAQA will also consider a follow-on public offering on the Abu Dhabi Stock Exchange to further diversify its shareholder base, allowing more investors to take advantage of the company’s potential for growth and expansion.H.E. Mohamed Hassan Alsuwaidi, Chief Executive Officer of ADQ, Vice Chairman of ADPower and Board Member of TAQA, said: “As ADQ seeks to harness and enhance the value and diversity of our investment portfolio to drive Abu Dhabi’s economic growth and prosperity, this transaction demonstrates what that means in highly visible and practical terms. The energy and power sector remains core to Abu Dhabi’s economy, and is still one of its most strategically important and most potent as a generator of revenue and a multiplier of value. Measured by scale and scalability, technical expertise and earning ability, the new combined entity is a true regional utilities champion, and a powerhouse for Abu Dhabi’s future.”Saeed Hamad Al Dhaheri, Chief Executive Officer of TAQA, commented: “This is a transformational deal for TAQA. We have complementary domestic and strong international footprints in the UAE, EMEA and the Americas, and this move gives us the financial muscle and expertise to capture new opportunities in the future.

The larger company will benefit from its extensive network to capitalise on growing demand for power and water while also playing a key role in supporting the UAE’s transition to clean energy as part of the country’s Energy Strategy 2050.”Jasim Husain Thabet, Chief Executive Office and Managing Director of ADPower, added:“This transaction pools the considerable resources of Abu Dhabi’s utilities sector to create significant added value, profitable growth and financial stability, advancing our water and electricity ambitions in alignment with our nation’s progressive, long-term vision. We are creating a powerful industry heavyweight, underpinned by a dynamic engine of growth that will continue to attract world-class talent, partnership and investment. Through deep collaboration and strategic execution, TAQA and ADPower will write a new chapter for our communities’ evolving water and electricity industry – and, in turn, for our nation – in the future.”Transaction StructureDuring TAQA’s Annual General Assembly, its shareholders, representing more than 89% of TAQA’s share capital, approved ADPower’s offer, submitted on 3  February 2020. Under the terms of the agreement, ADPower will transfer to TAQA the majority of its water and electricity generation, transmission and distribution assets in exchange for 106,367,950,000 new shares and the land lease agreement between the two companies will be terminated.This offer implies an exchange ratio of 17.53423833 new ordinary shares in TAQA issued for every existing TAQA share. When applied to ADPower’s valuation of the contributed assets, the offer implies an equity value of TAQA of AED 4.156 billion. When the transaction closes, ADPower will own 98.60% of the entire issued share capital of TAQA.The transaction is subject to regulatory and other approvals, including approval by the Abu Dhabi Department of Energy and the Securities and Commodities Authority.Creation of a Major Regional Utilities CompanyThe transaction consolidates the interests of the Abu Dhabi Government in power and water production assets in the UAE and creates one of the largest integrated utility companies in the GCC region.

The transaction is guided by the UAE’s Energy Strategy 2050 and Water Security Strategy 2036, designed by the Ministry of Energy and Industry to advance the cleaner and more efficient use of resources.TAQA will become a regional leader with the financial muscle and expertise to accelerate the transformation of the water and electricity sector and the capacity to pursue new opportunities in other international growth markets.TAQA will generate recurring, stable income with more than 85% of its revenues coming from regulated and long-term contracted businesses, supplemented by oil and gas assets. The Company will have a stronger long-term capital structure, which is expected to enable sustainable dividend distributions to shareholders, as well as the financial firepower for new investment both to enhance efficiency and to expand through new ventures.TAQA will be a top-10 integrated utilities player in the EMEA region by regulated assets and one of the largest publicly listed companies in the UAE, based on market capitalization.The Company benefits from significant operational scale.